Living Wage

Last updated: December 2015

Living Wage Struggle

The garment industry is a major employer across the world – in Asia for example over 15 million people are employed by the industry. With global brands making millions in profits every year this booming industry has come to rely on, and exploit, the cheap labour of millions of garment workers whose wages fall far short of a living wage.

The lack of a living wage means many garment workers are forced to work long hours to earn overtime or bonuses and cannot risk refusing work due to unsafe working conditions or taking time off due to ill health. The low wages mean that workers often have to rely on loans just to make ends meet and have no savings to use if they find themselves out of work.

A living wage calculation across a region is key to ensuring not only that workers receive a decent wage, but also that wage differences do not mean companies pull out of one country to move manufacturing to a country with lower costs – the so-called race to the bottom.

Living wage calculations must take into account some common factors including the number of family members to be supported, the basic nutritional needs of a worker and other basic needs including housing, healthcare, education and some basic savings.

The Asia Floor Wage calculation cannot be simply applied to other regions as some of the assumptions do not apply. For example, in Asia food costs are relatively high and standards of living such as housing are very low, whereas in other regions, such as Eastern Europe, food costs are relatively lower when compared to housing.

Clean Clothes Campaign partners are working on defining and calculating living wages for other garment producing regions.

They are calling for:

Clothing brands and companies to set concrete, measurable steps throughout their supply chain to ensure garment workers get paid a living wage.

National governments in garment producing countries to make sure minimum wages are set at living wage standards.

European governments to implement regulation to ensure companies are responsible for the impact they have on the lives of workers in their supply chain.

A Living Wage in Cambodia

For several years garment workers and trade unions in Cambodia have been engaged in a bitter conflict with the government over the minimum wage, with strikes, protests and brutal government crackdowns resulting in deaths, injuries and imprisonments. Garment workers want US$177 per month, enough cover their basic living expenses. In 2014, Asia Floor Wage calculated the living wage in Cambodia to be US$396 per month.

Though it has made increases, the Cambodian government has still not reached the $177 called for. Further negotiations and protests in October this year saw the government settle on $140 a month, to come into effect in January 2016. Needless to say, this has angered some. “This figure is reasonable and acceptable. Even it’s not acceptable to all, we have no choice,” Labour Minister Ith Sam Heng was quoted as saying.

The top five brands sourcing from Cambodia include three brands in these clothes guides: H&M, GAP, Levi Strauss & Co.

Living wage initiatives

Living Wage Now Forum

In October this year, the CCC’s Living Wage Now Forum brought together workers’ representatives from around the world, brand representatives (H&M, Primark, C&A, New Look, Pentland, N’Brown, and Tchibo), European policy makers, experts, and members of worker’s rights organisations, to discuss the next concrete steps towards a fashion industry that respects human rights and pays all workers a living wage, based on proposals from the CCC. Follow its progress here: www.livingwagenow.eu

ACT initiative

A number of brands and retailers are collaborating with the IndustriALL Global Union on the Action Collaboration Transformation (ACT), making a commitment to work with their suppliers in order to support a living wage.

Brands in this guide that are involved with ACT are: ASOS, H&M, Arcadia, Tesco, Primark, Next.*

*A full list of members could not be found but these companies were mentioned online in connection with the project.

What are the companies doing about living wages?

The following brands from this report explicitly make provision for a living wage in their supply chain policies: